Q: Vince, regarding resource adequacy in Pennsylvania, where do we stand with potential solutions, and could we see legislative proposals allowing utilities to own peaking assets? A: Vincent Sorgi, President and CEO: The delay in the auction reinforces the need for state control over this issue. We hope Pennsylvania continues pursuing state solutions without slowing down. PJM is expected to make supply-side improvements and update load forecasts, including data center loads. We anticipate legislation in early 2025, allowing utilities to invest in generation, potentially including low-interest loans and incentives for long-term power purchase agreements.
Q: How should we think about capital requirements for data center demand in Kentucky compared to Pennsylvania? A: Vincent Sorgi, President and CEO: The capital requirement for transmission related to data centers is less in Kentucky than in Pennsylvania due to generation supply constraints. We focus on building generation at existing sites, reducing the need for transmission investments. The significant capital requirement is around generation, as outlined in the updated IRP.
Q: What might be included in the first CPCN filing in Kentucky related to the IRP, and could it include a gas plant? A: Vincent Sorgi, President and CEO: We could file a CPCN as early as the first quarter, driven by the need for a second CCGT by 2030. The filing may include the second CCGT, additional dispatchable generation, and batteries to meet immediate demand increases from data centers.
Q: Can you provide an update on the relationship with the Kentucky commission given the new composition? A: Vincent Sorgi, President and CEO: The relationship remains constructive. Our team provides thoughtful, well-supported analysis, and the commission uses our operations as a model. We've met with the new commission, and nothing suggests a change in the constructive nature of our relationship.
Q: Regarding potential equity needs, given the cadence of CapEx raises, will you need equity in the plan? A: Joseph Bergstein, CFO: We're evaluating financing needs during our business planning process, considering additional capital needs for grid modernization, resiliency, and data center support. We've seen a trend of increasing rate-based growth, and we'll provide an update on our year-end call. We have flexibility to maximize value for shareholders and achieve earnings growth targets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.